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SURVEY RESEARCH OF THE CANNED CRAFT BEER INDUSTRY
Presented to the Faculty of the Agribusiness Department California Polytechnic State University
In Partial Fulfillment of the Requirements for the Degree Bachelor of Science
By Scott Taylor Hogland December 2013
ABSTRACT
This study on the canned craft beer industry was done to see whether or not a significant correlation between one’s age and their willingness to purchase craft beers in cans exists. Furthermore, it sets out to test how creating further consumer awareness highlighting the beneficial aspects of cans versus bottles could affect one’s purchasing decisions. In order to test the hypothesis that millennials are more open to purchasing canned craft beer, the statistical analysis software SPSS has been utilized. Frequencies have been run on every survey question to obtain an analysis of the entire population. Chi-square variance tests and independence sample t tests were utilized to examine any correlation between millennials and non-millennials. As expected, it has been determined that millennials are more open to purchasing craft beers in cans. Furthermore, boosting the promotion of cans over bottles would likely increase the purchasing for all age groups. Craft brewers should redirect some of their marketing strategy towards a younger demographic. The concept of their marketing plan should focus on the idea of a convenient product that has no compromise of taste.
TABLE OF CONTENTS Chapter
Page
I.
INTRODUCTION ........................................................................................... Statement of the Problem ..................................................................... Hypothesis ........................................................................................... Objectives of the Study ........................................................................ Significance of the Study .....................................................................
1 2 3 3 3
II.
REVIEW OF THE LITERATURE .................................................................. Craft Beer Industry History .................................................................. Study on Consumer Perception ............................................................ Addressing Survey Issues and Selecting Survey Method .................... Survey Research on Social Networks ..................................................
5 5 8 9 11
III.
METHODOLOGY ........................................................................................... Procedures for Data Collection ............................................................ Procedures for Data Analysis ............................................................... Assumptions and Limitations ...............................................................
15 15 16 18
IV.
DEVELOPMENT OF THE STUDY ............................................................... 19 Overview of Total Population .............................................................. 19 Testing the Hypothesis ......................................................................... 23
V.
SUMMARY, CONCLUSIONS, AND RECCOMMENDATIONS ................ Summary .............................................................................................. Conclusions .......................................................................................... Recommendations ................................................................................
31 31 31 32
References Cited ........................................................................................................... 34 APPENDIX .................................................................................................................. 36
Chapter 1
INTRODUCTION
As of March 2013, there were 2,360 reported craft breweries throughout the United States (Brewers Association, 2013). This statistic accounts for 47.6% brewpubs, 48.3% microbreweries, and 4.1% regional craft breweries. According to the Brewers Association, craft breweries are responsible for an estimated 108,440 jobs. In 2012, this industry experienced a 17% growth in total dollars and 15% in total volume (Brewers Association, 2013). From 2011 to 2012, craft brewing saw a drastic growth of 1.76 million barrels of beer sold. Finally, the total retail dollar value was estimated to be $10.2 billion, a substantial jump from the previous year (Brewers Association, 2013). The previous statistical values clearly demonstrate the recent success of the craft beer industry. Many of these breweries thrive off product differentiation, taste, unique labels, locality, etc. Amongst the many qualities that place craft beers in the upper echelon of the beer family is consumer perception. Until recently, a majority of consumers often connected the phrase “craft beer” with a bottle. However, many craft breweries have recently introduced canned beers to their line of production. Currently, 262 craft breweries have implemented cans in the United States. Of the 824 different brands that been released in cans from 2012 to 2013, 528 have been packaged in 12 oz. cans, 276 in 16 oz. cans, and the remaining 20 in varying sizes (Canned Craft Beer Stats, 2013). Some notable names include Sierra Nevada, New Belgium, and Boston Beer Brewing Companies. 1
Despite canned beers being introduced by brewers in 2002 and experiencing positive sales, producers continue to fight the perception that craft beers in cans lose their “premium status” without the bottle. This is possibly more prevalent amongst older beer drinkers as they are more rigid with their purchasing decisions. Millennials, generally living a more carefree lifestyle, appear much more open to purchasing craft beers in cans. Furthermore, enhancing consumer awareness amongst millennials concerning the beneficial aspects of aluminum cans vs. bottles could have a huge influence on consumer perception. Appealing to the millennial demographic by highlighting drinkability, environmental statistics of cans, and the increased “on-the-go” efficiency of this packaging would be very beneficial to craft brewers and consumers alike. For instance, consumers must be informed that almost every craft beer can contains a water based epoxy that assures the aluminum and beer never meet each other, solidifying an excellent taste. Concerning the environment, aluminum cans are 100% recyclable and have 68% recycled content, the highest of any beverage package material (Can Manufacturers Institute, 2013). Finally, cans present the best opportunity for enjoying beer on the go as many cities forbid the usage of bottles in public spaces such as parks and beaches.
Problem Statement What can be done to get rid of the stigma attached to canned craft beers amongst the older demographic (34+ years of age)?
2
Hypothesis
The millennial demographic (21-33) is more open to purchasing craft beers in cans than other age groups. Creating consumer awareness amongst both milliennials and the older demographic highlighting the beneficial aspects of cans versus bottles will further enhance their willingness to purchase.
Objectives 1) To examine how consumers perceive canned craft beers prior to gaining knowledge about certain characteristics. 2) Compare the millennial demographic (21-33) against the rest of consumers. 2) To see how highlighting the positive aspects of cans versus bottles changes millennials’ mindset and purchasing decisions. Significance of the Study Craft breweries are a fast expanding sector of the alcohol industry that make up 6.6% of the entire United States beer market (Beer Association, 2013). Taking a closer look at how consumers will react to canned craft beers could be a strong indicator of what to look forward to in the future. This study is very important for both the consumer and producer. The consumer, especially the younger demographic, ultimately wants to figure out if paying extra for a craft beer that is not bottled is worth it. The producer wants to know if it is economically feasible and smart to continue canning their beers. Gaining a
3
deeper understanding about consumer perceptions and willingness to buy is the deciding factor that could decide the future of craft beers in cans.
4
Chapter 2
REVIEW OF THE LITERATURE
Craft Beer Industry History
Craft breweries are part of a fast expanding industry despite being very small in scale compared to the entire beer market. Craft breweries make up 6.6% of the entire United States beer market but have experienced 17% growth in total sales since 2012 (Beer Association, 2013). According to Kleban and Nickerson (2011), craft breweries tend to be independent and produce fewer than 6 million barrels each year. The concept of being independent means that at least 75% of the company is owned by someone who is a craft brewer themselves. By introducing non-traditional brewing methods to coincide with conventional ingredients such as malted barley, they are able to create full tasting beers. Microbreweries thrive off product differentiation. Kleban and Nickerson (2011) explain how there are 6 categories of craft breweries depending on total output of barrels per year. The list from smallest to largest goes in this order: microbreweries, brewpub, contract brewing company, regional craft brewery, and large brewery. To be classified a microbrewery, at least 75% of beer must be sold off-site and less than 15,000 barrels per year can be produced (Beer Association, 2013). A brewpub primarily sells their product at a restaurant or bar, with at least 25% of beer sales on site (Beer Association, 2013). Contract Brewing Companies hire another party to produce their beer. The Beer 5
Association (2013) goes into deeper detail by stating, “The contract brewing company handles marketing, sales, and distribution of its beer, while generally leaving the brewing and packaging to its producer-brewery.” Finally, a large brewery is one that has a yearly beer production of 6,000,000 barrels or more (Beer Association, 2013). Kleban and Nickerson (2011) continue to reiterate the concept of product differentiation in stating, “competition within the domestic craft beer segment and other high quality beer categories is based on product quality, consistency, freshness, and taste. Craft breweries must also be keen in their ability to produce by utilizing a variety of methods, mainly: promotional tactics, customer satisfaction programs, distribution costs and price.” The most competitive segment of the craft brewery segments is microbreweries due to the fact there are many of them but make up a small portion of the market share amongst the total beer market (Beer Association, 2013). Although national breweries tend to have the financial capability for expensive promotion, microbreweries thrive off local consumers that desire a “unique” product. Strong competitors are in the international market as imports make up a strong percentage of craft beer sales. Furthermore, the general beer segment continues to lose nearly 1% of market share to the wine segment each year since 2003 (US Census Bureau, 2013). Despite the strong presence of large National Beer companies, the Global Market Information Data Resource (GMID) (2012) states that the “movement of smaller craft breweries has been extremely dynamic.” In fact, there are around 100 new microbreweries opening up across the United States each year. Despite this
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significant growth, GMID (2012) shows that it is very hard for these small-privatized labels to gain a significant share of the United States beer market due to the threetier system that enforces varying regulations in different states. Boston Beer Co Inc., Sierra Nevada Brewing Company, and New Belgium comprise the top three craft breweries in the United States but only make up 1.8% of national beer shares in volume (Beer Association, 2013). A strong majority of the total United States beer sales in total volume belong to MillerCoors LLC and AB InBev. Furthermore, GMID explains how many big corporations such as these two are buying out craft breweries, leading a trend towards mergers. Along this topic, the top four brands in the US market have similar inexpensive pricing strategies of $5-$6 per six pack. This competitive marketing segment makes it essential for craft breweries to differentiate their generally higher priced products. Various studies have been completed attempting to project craft beer market growth over the next few years. Infiniti Research Ltd conducted a research highlighting where they believe the market will be in 2016. Contributing researchers to this study believe the craft beer market will grow at a rate of 17.46 over the span of 2012-2016. Much of this projection is based on an apparent change in consumer taste and desire for craft beer. Furthermore, they believe a huge contributing factor to this growth rate is the addition of cans to many packaging lines for craft breweries. Along with the three big craft breweries mentioned in the previous paragraph, contributors to this report also discuss a list of other craft breweries making an impact in the craft beer market. This list goes includes the following: Anheuser Busch Inc., Bell’s Brewery Inc., Boulevard Brewing Co., 7
Deschutes Brewery Co., Lagunitas Brewing Co., Matt Brewing Co., MillerCoors LLC, and Oskar Blues Brewing Co. Although the numerous studies on the craft beer industry may vary, there appears to be one reappearing theme. Even though the market is somewhat dominated my mass-producing brewing companies, the number of small craft breweries continue to increase rather steadily. Stanford Professor Glenn Carroll (2013) believes that these apparently contradictory trends may be in fact be interrelated and have some sense of organizational ecology.
Study on Consumer Perception Many factors come in to play when analyzing consumer perception concerning a particular brand of beer. Looking at cans vs. bottles implies a variety of characteristics including price, taste, labels, etc. that influence overall perception. Allison and Uhl (1994) attempt to explain this complex relationship in their survey study of beer brand identification on taste perception. Their study strives to prove that beer drinkers cannot distinguish between two unlabeled brands based on taste, strengthening the argument that perception is what drives consumer purchasing. To perform this study, 326 randomly selected beer drinkers were given an unlabeled 6 pack of beer, consisting of multiple regional and national brands with differing taste characteristics. The taste test proved there was no difference between the brands at a .05 significance level. If the p-value is lower than .05, the null is rejected and relationship is concluded. Allison and Uhl (1994) found a strong
8
correlation. In fact, most respondents couldn’t even distinguish their favorite brand from others. The label test performed by Allison and Uhl discussed in the previous paragraphs show that knowing the label of beer prior to the survey resulted in much higher ratings on the specified categories of taste, once again strengthening the argument that perception is a huge factor in gaining purchasing and brand loyalty. In relation to cans vs. bottles, this study shows that the main focus must be on marketing efforts that emphasize certain characteristics whether it be environmental/sustainability issues, convenience, label designs, etc. Huffington (2012) demonstrates this concept in her related survey study as a mere 44% of respondents correctly identified a canned Sierra Nevada Torpedo vs. bottled when the beer was poured into cups. Therefore, creating enhanced consumer awareness is vital in influencing a certain product characteristic such as cans over bottles.
Addressing Survey Issues and Selecting Survey Method
William M.K. Trochim’s study examines multiple issues that must be considered when deciding a proper survey method. The first issue discussed is population issues. Some of the various factors include whether or not the population can be counted, literacy issues, language barriers, and most importantly whether or not the respondents will cooperate (Trochim, 2006). Many people have very busy schedules or simply do not want to partake in a survey. Furthermore, some surveys
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try to examine controversial subjects and respondents don’t feel comfortable helping out with the research. The final aspect of population issues is geography. Some survey requires the study to examine a wide geographic range, which makes proper findings less feasible (Trochim, 2006). The next important survey aspect to consider are issues with the questions that will be asked. It is important to decide what types of questions are to be asked, how complex they will be, and whether or not screening questions will be needed (Trochim, 2006). For example, in the case of an alcohol survey, it is mandatory to have an age screening question to assure no one under 21 completes the survey. Quite possibly the most important part of the questioning is the actual content and how it relates to the population being surveyed. The respondent should have at least some background knowledge of the topic of study being examined (Trochim, 2006). Once again, this applies to an alcohol study as the respondent should be a consumer of the product being discussed whether beer, wine, spirits, etc. The next issue is one that every survey administer attempts to avoid, bias issues. A main concern for many people is standing out socially. No respondent wants to be embarrassed, feel unintelligent, etc. so they are often tempted to lie (Trochim, 2006). This is often more of an issue when delivering surveys face-to-face. Trochim explains some tactics to approaching a face-face survey. For instance, an interviewer may pretend to listen less attentively for questions that could potentially put the respondent in an awkward position. Furthermore, they could avoid asking the question all together (Trochim, 2006).
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This leads into the discussion of deciding what form of survey to conduct. Surveys can be broadly divided into two main categories, questionnaires and interviews (Sincero 2012). Questionnaires generally contain close-ended questions and can be both self and group administered. Self-administered tests are often referred to as mail survey. However, mail surveys generally don’t result in the best response rate so many surveyors now utilize web survey resources (Sincero 2012). Questionnaires are often regarded as best for conducting consumer research, but presents more limited responses compared to interviews (Sincero 2012). Clearly, interviews are a much more personal form of interviewing. Different forms of interviewing include phone interviews, face-to-face interviews, and online interviews (Sincero 2012). One main advantage is that interviewing offers time to conduct follow up questions based on the responses given. However, personal interviews are extremely time consuming, a common problem faced by many surveyors (Sincero 2012).
Survey Research on Social Networks
Survey research is a measurement tool that helps assess particular opinions, feelings, concerns, etc. in various fields of study. This study utilizes survey research to examine consumer perception of canned vs. bottled craft beers. Due to the fact
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this is a rather unexplored area of study, it is important to take every measure possible to gain a fair population representation. The most important part of creating a fair survey study is targeting a sample population that accurately represents a larger population. Sampling is a very fickle form of market analysis as it is open to selection bias through unique population demographics (Brickman-Bhutta, 2000). Another common problem is a small sample size, as it may not accurately estimate unknown parameters. Therefore, it is essential that proper survey techniques are utilized to assure the most accurate results possible. Brickman-Bhutta (2000) analyzes the various new opportunities of Internet research methods through social networks, stressing distribution efficiency while maintaining validity. Furthermore, Brickman-Bhutta highlights the multiple challenges that exist with Internet research methods. According to Brickman-Bhutta (2000), “Online social networking sites offer new ways for researchers to run surveys quickly, cheaply, and single-handedly – especially when seeking to construct “snowball” samples of small or stigmatized subsets of the general population.” Out of all the social networking sites, Facebook is best suited for performing market research because each user has their own set of online friends while also having access to millions of users worldwide if needed. This is especially relevant to the study of canned vs. bottled craft beers as the study targets the younger demographic between the age of 21 and 33, which is an easily accessible demographic.
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Along with being the biggest and fastest growing social network in the world, Facebook presents various other positive qualities. For instance, Facebook provides information and designated pages for different interests, education levels, and hobbies that could be used to analyze sub populations of beer drinkers. Also, this form of social networking is becoming more and more representative of the United States population. According to O’Dell (2011), nearly 43% of the American population uses Facebook at least once a month compared to only 7% on twitter. Furthermore, a strong majority of the Facebook population falls under the age demographic of 21-25. One of the biggest research methods discussed in Brickmann-Bhutta’s (2000) study is called snowballing, a chain-referral type of online survey. This technique is useful in that it takes a small sample population related to a certain population, and asks these individuals to recommend others for the survey study based on certain characteristics. Doing this is beneficial in that it gradually increases the sample size and targets desired subpopulations. For the study of consumer perception of canned craft beer vs. bottled, it could be very useful to delineate the population into various groups such as college undergraduate, graduate, post-graduate work etc. Furthermore, people feel more willing to offer up personal information such as income, marital status and current living location online rather than face-to-face. However, the only downside as mentioned by Brickmann-Bhutta (2009) is the possibility for sample bias, which needs to be avoided. Some of the other potential problems according to Schmidt (1998) include incomplete responses, unacceptable
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responses, and multiple submissions. These are all risks that can be avoided by taking the proper measures.
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Chapter 3
METHODOLOGY
Procedures for Data Collection-
Consumer perception is the main point of focus in this survey study. The first portion of the survey will measure the current level of knowledge and perception concerning canned versus bottled craft beer. Once this area of the survey is completed, consumers will be asked to read a list of qualities comparing aluminum cans versus bottles. Furthermore, the survey will measure the level of importance that drinkability convenience, recycling, pricing, etc. has when it comes to purchasing decisions. The final portion will attempt to analyze how consumer perception is changed with new awareness and whether or not future purchasing decisions will vary. The hypothesis states that millennials are more open to purchasing canned craft beers. In order to fulfill the survey requirements, a sample size of 150+ will be needed. Of the desired 150 respondents, at least 75 will be of the age range 21-33 and the other half will fall under the age range of 28+. This gives the surveyor a chance to compare data from millennial respondents against the rest of the population. A mix of primary and secondary data will be utilized to perform the necessary statistical analysis. Online survey distribution via the social network Facebook will be utilized to reach the quota of 75+ respondents in the age group 21-33. Facebook and Email will be used to obtain the desired 75+ respondents above the age of 33. Surveys will be hand distributed throughout the process as well to help meet the desired level of responses. Ultimately, there is no
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limit on the sample size as bigger samples help limit bias and statistical error. The fluctuant time range of when the data must be obtained is from September 2013November 2013. This will give ample time to perform the desired statistical analysis and test the hypothesis. The survey will begin with two screening questions. The first one will determine the age of the respondent. If the respondent is under 21 years of age, the survey will be terminated. The next screening question asks what types of beers they have purchased in the past month. The list includes domestic, imported, craft, and none of the above. Once again, the survey will be terminated if a “none of the above” response is provided. These two questions will be presented on the first page of the survey. This canned beer study will consist of 15 questions. The survey format will be comprised of eight ordinal, four nominal, and three ratio questions. Three demographic questions including gender, age, and income will also be included to help analyze our results.
Procedures for Data Analysis
A .05 level for extreme significance and .1 level for moderate significance will be used for any test that examines a correlation. A list of the analysis functions that will be utilized include the following: frequencies, descriptives, chi square tests of variance, and independent sample t tests. Once the data is gathered, frequencies will be run on each question to make sure no bad data was obtained. “Bad data” means that a respondent
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answered with a number that does not correspond with the survey options. If bad data is present, it will be necessary to recode and add the unwanted data as “system missing.” This is a very important step as not doing so would skew our data, a very concerning possibility for survey analysis. Once all bad data is removed, frequencies will be run on every question to obtain a statistical overview of the entire population. It is important to note any skewed data or interesting trends before subdividing the data. Once results from the total population are obtained, the data on the spss software will be recoded into two groups, millennials and non-millennials. Therefore, all respondents of age groups 21-33 will be recoded and entered into the system as 1 and the rest of the population will be recoded and entered as a 2. This makes it possible to test the target population against the older demographic when performing chi square test of variance and independent sample t tests. The first test that will be run is a chi square variance test comparing what types of beer the respondents had purchased over the past three months. The list will include domestic, imported, and craft. The next two tests will be independent sample t tests to determine how much the two age groups spend on beer in a typical month and the number of 12 oz. bottles/cans of beer they purchase in a typical month. The remaining questions will be analyzed with chi square tests of variance. All of the data except for questions 11 and 13 will be analyzed in the exact same fashion. The two questions mentioned previously will require a recode of the data to obtain the desired results. For example, all of the respondents that responded to question 11 with 70% or higher will be recoded and entered into the system as a 1 and the rest of
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the responses will be recoded and entered into the system as a 2. The similar procedure will be performed for question 13 except the data will be analyzed at the 80% level instead of 70%. These two questions will be the main focus on determining whether or not to accept the null hypothesis. As mentioned previously, a p-value of .05 will exemplify strong significance to accept the null and a p-value of .1 or less will represent moderate significance. Assumptions It is assumed that each respondent answered the survey questions truthfully. Furthermore, we will assume that the sample population of 150+ accurately reflects a larger population. Finally, it will be assumed that respondents generated via the social network Facebook are similar to the respondents located in San Luis Obispo County. Limitations This study will obtain most of its responses from the San Luis Obispo and Bay Area counties. These counties may not accurately reflect California and the United States. Furthermore, this survey is limited to actual “beer drinkers” rather than testing how raising consumer awareness affects the entire population. Finally, the study is limited to individuals who are willing to participate in the survey research.
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Chapter 4 DEVELOPMENT OF THE STUDY Empirical Results for Canned Craft Beer Study (Overview of Total Population):
Age Distribution 21-24 25-28 29-33 34-38 39-44 45-50 51-56 57-64 65+
42% 7% 7% 3% 3% 4% 10% 14% 7%
-As expected, the age demographic of 21-24 had the largest share of responses at 42% -The rest of the data was fairly evenly represented with the age range of 57-64 having the second highest showing at 14% - Middle aged respondents, 34-50, appear to be the minority demographic (combined 10%)
Types of Beer Purchased 75%
- The largest percent of respondents reported they had purchased domestic beer in the past 3 months (71%)
70%
65%
- Craft beer was a close second at 68%, and imported came in at 60%, demonstrating a fairly constant distribution of responses
60% 55% 50%
Domestic Beer
Imported Beer
Craft Beer
Price Range for Six Pack Purchases $0-$2.49 $2.50-$4.99 $5.00-$6.49 $6.50-$7.99 $8.00-$9.49 $9.50-$10.99 $11.00+
0% 1% 6% 23% 40% 23% 5%
- The most common purchased six pack was in the price range of $8.00-$9.49 at 40% - The price ranges directly below and above the $8.00-$9.49 range had the exact same results at 23% a piece
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How Appealing are Craft Beers? 80%
- A majority of respondents said craft beers are either extremely or very appealing to them (70%)
70% 60% 50%
- The other 30% comprised of respondents who said craft beers were either somewhat appealing, not very appealing, or not at all appealing,
40% 30%
20% 10% 0% Extremely/Very Appealing
Somewhat/Not Very/Not at all Appealing
Percentage of Purchases at Retail Outlet - About 3/4 of beer purchases in retail outlets were in the form of a bottle compared to 1/4 in cans
Can 27% Bottle 73%
Can
Bottle
Percentage of Purchases Consisting of Craft Beers Percentage Range 0%-19% 20%-39% 40%-59% 60%-79% 80%-100%
Retail Outlet
32% 20% 12% 14% 23%
Bar/Restaurant 23% 15% 14% 23%
-For retail outlet purchases, a majority of respondents at 32% stated that 0%-19% of their purchases were craft beers, while 23% stated 80%-100% consisted of craft beers -Bar/Restaurants saw a fairly even distribution with 26% responding that 80%-100% of purchases were craft beers and 23% responding with 0%-19%
26%
Total Amount of Beer Purchased/Month
Maximum Response
Average
Money Spent in Typical Month 12 oz Bottles/Cans Purchased in Typical Month
$250 200
$35.26 21.335
-As an entire population, the average amount spent on beer in a typical month was $35.26. Most respondents purchased about twenty-one 12 oz. bottles/cans of beer in a month.
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Top Desirability for Each Figure Feature Prestigious Brand Creative Label Locally Produced Inexpensive Recommended by Friends High Alcohol Content On Sale Packaged in a Bottle Made by a Craft Brewer Environmentally Friendly Package
Top Response
Percent
Somewhat Desirable Somewhat Desirable Very Desirable Somewhat Desirable Very Desirable Somewhat Desirable Very Desirable Very Desirable Very Desirable Somewhat Desirable
36% 32% 34% 36% 51% 29% 30% 45% 32% 28%
- The most desirable trait for any beer purchase is one recommended by friends. This category most commonly received responses of “very desirable” at 51% -The least desirable trait for purchasing beer is one with an environmentally friendly package. The top response for this category was somewhat desirable at 28%.
Preferred Form of Packaging Based on Perception Description Interesting Label Design Drinking Convenience More Environmentally Friendly Better Feel in Hand Embodies idea of "craft beer" Cheaper Product Better Taste Overall Appeal
Preference (Bottle/Can) Bottle Can Can Bottle Bottle Can Bottle Bottle
Percent 62% 76% 53% 88% 95% 84% 92% 87%
-95% of respondents said that bottles embody the idea of a “craft beer” more than cans -Collectively, it appears that bottles are favored over cans based on the descriptions -Cans received a majority of responses on three out of the eight descriptions: drinking convenience (76%), more environmentally friendly (53%), and cheaper product (84%) 21 -It appears that consumers see cans as a cheaper and more convenient form of drinking beer rather than something representing a premium craft beer product
Level of Willingness to Purchase Craft Beers in Can (Change in Top 3) Certain Will Buy (99 chances in 100) Almost Sure Will Buy (90 chances in 100) Very Probably Will Buy (80 chances in 100)
Before
After
5%
11%
12%
18%
19%
30%
-It appears that creating further consumer awareness about the beneficial aspects of cans vs. bottles would increase the purchasing of craft beers in cans -After reading the information provided, 59% of the respondents said they were either “certain to buy,” “almost sure to buy,” or “very probable to buy.” This means that 59% of the respondents were at least 80% sure they would be willing to purchase craft beers in cans
Gender Distribution Female 29%
-A strong majority of the respondents were male (71%)
Male 71%
Income Before Taxes unemployed/student under $10,000 $10,000-$14,999 $15,000-$19,999 $20000-$24,999 $25,000-$29,999 $30,000-$34,999 $35,000-$39,999 $40,000-$49,999 $50,000-$59,999 $60,000-$74,999 $75,000-$149,000 $150,000 or more
16% 9% 4% 2% 0% 4% 3% 4% 1% 5% 7% 14% 30%
-The largest percentage of respondents had a total annual income before taxes of $150,000 or more- 30% -The next closest group were individuals that were either unemployed or students- 16%
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Testing the Hypothesis: “The millennial demographic (21-33) is more open to purchasing craft beers in cans than other age groups. Creating consumer awareness amongst both millennials and nonmillennials highlighting the beneficial aspects of cans versus bottles will further enhance their willingness to purchase.” *In order to test the hypothesis, the data was recoded into the following groups: millennials (21-33) and non-millennials (34+) *Strength of correlation was determined as followed: P-value
Presented to the Faculty of the Agribusiness Department California Polytechnic State University
In Partial Fulfillment of the Requirements for the Degree Bachelor of Science
By Scott Taylor Hogland December 2013
ABSTRACT
This study on the canned craft beer industry was done to see whether or not a significant correlation between one’s age and their willingness to purchase craft beers in cans exists. Furthermore, it sets out to test how creating further consumer awareness highlighting the beneficial aspects of cans versus bottles could affect one’s purchasing decisions. In order to test the hypothesis that millennials are more open to purchasing canned craft beer, the statistical analysis software SPSS has been utilized. Frequencies have been run on every survey question to obtain an analysis of the entire population. Chi-square variance tests and independence sample t tests were utilized to examine any correlation between millennials and non-millennials. As expected, it has been determined that millennials are more open to purchasing craft beers in cans. Furthermore, boosting the promotion of cans over bottles would likely increase the purchasing for all age groups. Craft brewers should redirect some of their marketing strategy towards a younger demographic. The concept of their marketing plan should focus on the idea of a convenient product that has no compromise of taste.
TABLE OF CONTENTS Chapter
Page
I.
INTRODUCTION ........................................................................................... Statement of the Problem ..................................................................... Hypothesis ........................................................................................... Objectives of the Study ........................................................................ Significance of the Study .....................................................................
1 2 3 3 3
II.
REVIEW OF THE LITERATURE .................................................................. Craft Beer Industry History .................................................................. Study on Consumer Perception ............................................................ Addressing Survey Issues and Selecting Survey Method .................... Survey Research on Social Networks ..................................................
5 5 8 9 11
III.
METHODOLOGY ........................................................................................... Procedures for Data Collection ............................................................ Procedures for Data Analysis ............................................................... Assumptions and Limitations ...............................................................
15 15 16 18
IV.
DEVELOPMENT OF THE STUDY ............................................................... 19 Overview of Total Population .............................................................. 19 Testing the Hypothesis ......................................................................... 23
V.
SUMMARY, CONCLUSIONS, AND RECCOMMENDATIONS ................ Summary .............................................................................................. Conclusions .......................................................................................... Recommendations ................................................................................
31 31 31 32
References Cited ........................................................................................................... 34 APPENDIX .................................................................................................................. 36
Chapter 1
INTRODUCTION
As of March 2013, there were 2,360 reported craft breweries throughout the United States (Brewers Association, 2013). This statistic accounts for 47.6% brewpubs, 48.3% microbreweries, and 4.1% regional craft breweries. According to the Brewers Association, craft breweries are responsible for an estimated 108,440 jobs. In 2012, this industry experienced a 17% growth in total dollars and 15% in total volume (Brewers Association, 2013). From 2011 to 2012, craft brewing saw a drastic growth of 1.76 million barrels of beer sold. Finally, the total retail dollar value was estimated to be $10.2 billion, a substantial jump from the previous year (Brewers Association, 2013). The previous statistical values clearly demonstrate the recent success of the craft beer industry. Many of these breweries thrive off product differentiation, taste, unique labels, locality, etc. Amongst the many qualities that place craft beers in the upper echelon of the beer family is consumer perception. Until recently, a majority of consumers often connected the phrase “craft beer” with a bottle. However, many craft breweries have recently introduced canned beers to their line of production. Currently, 262 craft breweries have implemented cans in the United States. Of the 824 different brands that been released in cans from 2012 to 2013, 528 have been packaged in 12 oz. cans, 276 in 16 oz. cans, and the remaining 20 in varying sizes (Canned Craft Beer Stats, 2013). Some notable names include Sierra Nevada, New Belgium, and Boston Beer Brewing Companies. 1
Despite canned beers being introduced by brewers in 2002 and experiencing positive sales, producers continue to fight the perception that craft beers in cans lose their “premium status” without the bottle. This is possibly more prevalent amongst older beer drinkers as they are more rigid with their purchasing decisions. Millennials, generally living a more carefree lifestyle, appear much more open to purchasing craft beers in cans. Furthermore, enhancing consumer awareness amongst millennials concerning the beneficial aspects of aluminum cans vs. bottles could have a huge influence on consumer perception. Appealing to the millennial demographic by highlighting drinkability, environmental statistics of cans, and the increased “on-the-go” efficiency of this packaging would be very beneficial to craft brewers and consumers alike. For instance, consumers must be informed that almost every craft beer can contains a water based epoxy that assures the aluminum and beer never meet each other, solidifying an excellent taste. Concerning the environment, aluminum cans are 100% recyclable and have 68% recycled content, the highest of any beverage package material (Can Manufacturers Institute, 2013). Finally, cans present the best opportunity for enjoying beer on the go as many cities forbid the usage of bottles in public spaces such as parks and beaches.
Problem Statement What can be done to get rid of the stigma attached to canned craft beers amongst the older demographic (34+ years of age)?
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Hypothesis
The millennial demographic (21-33) is more open to purchasing craft beers in cans than other age groups. Creating consumer awareness amongst both milliennials and the older demographic highlighting the beneficial aspects of cans versus bottles will further enhance their willingness to purchase.
Objectives 1) To examine how consumers perceive canned craft beers prior to gaining knowledge about certain characteristics. 2) Compare the millennial demographic (21-33) against the rest of consumers. 2) To see how highlighting the positive aspects of cans versus bottles changes millennials’ mindset and purchasing decisions. Significance of the Study Craft breweries are a fast expanding sector of the alcohol industry that make up 6.6% of the entire United States beer market (Beer Association, 2013). Taking a closer look at how consumers will react to canned craft beers could be a strong indicator of what to look forward to in the future. This study is very important for both the consumer and producer. The consumer, especially the younger demographic, ultimately wants to figure out if paying extra for a craft beer that is not bottled is worth it. The producer wants to know if it is economically feasible and smart to continue canning their beers. Gaining a
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deeper understanding about consumer perceptions and willingness to buy is the deciding factor that could decide the future of craft beers in cans.
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Chapter 2
REVIEW OF THE LITERATURE
Craft Beer Industry History
Craft breweries are part of a fast expanding industry despite being very small in scale compared to the entire beer market. Craft breweries make up 6.6% of the entire United States beer market but have experienced 17% growth in total sales since 2012 (Beer Association, 2013). According to Kleban and Nickerson (2011), craft breweries tend to be independent and produce fewer than 6 million barrels each year. The concept of being independent means that at least 75% of the company is owned by someone who is a craft brewer themselves. By introducing non-traditional brewing methods to coincide with conventional ingredients such as malted barley, they are able to create full tasting beers. Microbreweries thrive off product differentiation. Kleban and Nickerson (2011) explain how there are 6 categories of craft breweries depending on total output of barrels per year. The list from smallest to largest goes in this order: microbreweries, brewpub, contract brewing company, regional craft brewery, and large brewery. To be classified a microbrewery, at least 75% of beer must be sold off-site and less than 15,000 barrels per year can be produced (Beer Association, 2013). A brewpub primarily sells their product at a restaurant or bar, with at least 25% of beer sales on site (Beer Association, 2013). Contract Brewing Companies hire another party to produce their beer. The Beer 5
Association (2013) goes into deeper detail by stating, “The contract brewing company handles marketing, sales, and distribution of its beer, while generally leaving the brewing and packaging to its producer-brewery.” Finally, a large brewery is one that has a yearly beer production of 6,000,000 barrels or more (Beer Association, 2013). Kleban and Nickerson (2011) continue to reiterate the concept of product differentiation in stating, “competition within the domestic craft beer segment and other high quality beer categories is based on product quality, consistency, freshness, and taste. Craft breweries must also be keen in their ability to produce by utilizing a variety of methods, mainly: promotional tactics, customer satisfaction programs, distribution costs and price.” The most competitive segment of the craft brewery segments is microbreweries due to the fact there are many of them but make up a small portion of the market share amongst the total beer market (Beer Association, 2013). Although national breweries tend to have the financial capability for expensive promotion, microbreweries thrive off local consumers that desire a “unique” product. Strong competitors are in the international market as imports make up a strong percentage of craft beer sales. Furthermore, the general beer segment continues to lose nearly 1% of market share to the wine segment each year since 2003 (US Census Bureau, 2013). Despite the strong presence of large National Beer companies, the Global Market Information Data Resource (GMID) (2012) states that the “movement of smaller craft breweries has been extremely dynamic.” In fact, there are around 100 new microbreweries opening up across the United States each year. Despite this
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significant growth, GMID (2012) shows that it is very hard for these small-privatized labels to gain a significant share of the United States beer market due to the threetier system that enforces varying regulations in different states. Boston Beer Co Inc., Sierra Nevada Brewing Company, and New Belgium comprise the top three craft breweries in the United States but only make up 1.8% of national beer shares in volume (Beer Association, 2013). A strong majority of the total United States beer sales in total volume belong to MillerCoors LLC and AB InBev. Furthermore, GMID explains how many big corporations such as these two are buying out craft breweries, leading a trend towards mergers. Along this topic, the top four brands in the US market have similar inexpensive pricing strategies of $5-$6 per six pack. This competitive marketing segment makes it essential for craft breweries to differentiate their generally higher priced products. Various studies have been completed attempting to project craft beer market growth over the next few years. Infiniti Research Ltd conducted a research highlighting where they believe the market will be in 2016. Contributing researchers to this study believe the craft beer market will grow at a rate of 17.46 over the span of 2012-2016. Much of this projection is based on an apparent change in consumer taste and desire for craft beer. Furthermore, they believe a huge contributing factor to this growth rate is the addition of cans to many packaging lines for craft breweries. Along with the three big craft breweries mentioned in the previous paragraph, contributors to this report also discuss a list of other craft breweries making an impact in the craft beer market. This list goes includes the following: Anheuser Busch Inc., Bell’s Brewery Inc., Boulevard Brewing Co., 7
Deschutes Brewery Co., Lagunitas Brewing Co., Matt Brewing Co., MillerCoors LLC, and Oskar Blues Brewing Co. Although the numerous studies on the craft beer industry may vary, there appears to be one reappearing theme. Even though the market is somewhat dominated my mass-producing brewing companies, the number of small craft breweries continue to increase rather steadily. Stanford Professor Glenn Carroll (2013) believes that these apparently contradictory trends may be in fact be interrelated and have some sense of organizational ecology.
Study on Consumer Perception Many factors come in to play when analyzing consumer perception concerning a particular brand of beer. Looking at cans vs. bottles implies a variety of characteristics including price, taste, labels, etc. that influence overall perception. Allison and Uhl (1994) attempt to explain this complex relationship in their survey study of beer brand identification on taste perception. Their study strives to prove that beer drinkers cannot distinguish between two unlabeled brands based on taste, strengthening the argument that perception is what drives consumer purchasing. To perform this study, 326 randomly selected beer drinkers were given an unlabeled 6 pack of beer, consisting of multiple regional and national brands with differing taste characteristics. The taste test proved there was no difference between the brands at a .05 significance level. If the p-value is lower than .05, the null is rejected and relationship is concluded. Allison and Uhl (1994) found a strong
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correlation. In fact, most respondents couldn’t even distinguish their favorite brand from others. The label test performed by Allison and Uhl discussed in the previous paragraphs show that knowing the label of beer prior to the survey resulted in much higher ratings on the specified categories of taste, once again strengthening the argument that perception is a huge factor in gaining purchasing and brand loyalty. In relation to cans vs. bottles, this study shows that the main focus must be on marketing efforts that emphasize certain characteristics whether it be environmental/sustainability issues, convenience, label designs, etc. Huffington (2012) demonstrates this concept in her related survey study as a mere 44% of respondents correctly identified a canned Sierra Nevada Torpedo vs. bottled when the beer was poured into cups. Therefore, creating enhanced consumer awareness is vital in influencing a certain product characteristic such as cans over bottles.
Addressing Survey Issues and Selecting Survey Method
William M.K. Trochim’s study examines multiple issues that must be considered when deciding a proper survey method. The first issue discussed is population issues. Some of the various factors include whether or not the population can be counted, literacy issues, language barriers, and most importantly whether or not the respondents will cooperate (Trochim, 2006). Many people have very busy schedules or simply do not want to partake in a survey. Furthermore, some surveys
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try to examine controversial subjects and respondents don’t feel comfortable helping out with the research. The final aspect of population issues is geography. Some survey requires the study to examine a wide geographic range, which makes proper findings less feasible (Trochim, 2006). The next important survey aspect to consider are issues with the questions that will be asked. It is important to decide what types of questions are to be asked, how complex they will be, and whether or not screening questions will be needed (Trochim, 2006). For example, in the case of an alcohol survey, it is mandatory to have an age screening question to assure no one under 21 completes the survey. Quite possibly the most important part of the questioning is the actual content and how it relates to the population being surveyed. The respondent should have at least some background knowledge of the topic of study being examined (Trochim, 2006). Once again, this applies to an alcohol study as the respondent should be a consumer of the product being discussed whether beer, wine, spirits, etc. The next issue is one that every survey administer attempts to avoid, bias issues. A main concern for many people is standing out socially. No respondent wants to be embarrassed, feel unintelligent, etc. so they are often tempted to lie (Trochim, 2006). This is often more of an issue when delivering surveys face-to-face. Trochim explains some tactics to approaching a face-face survey. For instance, an interviewer may pretend to listen less attentively for questions that could potentially put the respondent in an awkward position. Furthermore, they could avoid asking the question all together (Trochim, 2006).
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This leads into the discussion of deciding what form of survey to conduct. Surveys can be broadly divided into two main categories, questionnaires and interviews (Sincero 2012). Questionnaires generally contain close-ended questions and can be both self and group administered. Self-administered tests are often referred to as mail survey. However, mail surveys generally don’t result in the best response rate so many surveyors now utilize web survey resources (Sincero 2012). Questionnaires are often regarded as best for conducting consumer research, but presents more limited responses compared to interviews (Sincero 2012). Clearly, interviews are a much more personal form of interviewing. Different forms of interviewing include phone interviews, face-to-face interviews, and online interviews (Sincero 2012). One main advantage is that interviewing offers time to conduct follow up questions based on the responses given. However, personal interviews are extremely time consuming, a common problem faced by many surveyors (Sincero 2012).
Survey Research on Social Networks
Survey research is a measurement tool that helps assess particular opinions, feelings, concerns, etc. in various fields of study. This study utilizes survey research to examine consumer perception of canned vs. bottled craft beers. Due to the fact
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this is a rather unexplored area of study, it is important to take every measure possible to gain a fair population representation. The most important part of creating a fair survey study is targeting a sample population that accurately represents a larger population. Sampling is a very fickle form of market analysis as it is open to selection bias through unique population demographics (Brickman-Bhutta, 2000). Another common problem is a small sample size, as it may not accurately estimate unknown parameters. Therefore, it is essential that proper survey techniques are utilized to assure the most accurate results possible. Brickman-Bhutta (2000) analyzes the various new opportunities of Internet research methods through social networks, stressing distribution efficiency while maintaining validity. Furthermore, Brickman-Bhutta highlights the multiple challenges that exist with Internet research methods. According to Brickman-Bhutta (2000), “Online social networking sites offer new ways for researchers to run surveys quickly, cheaply, and single-handedly – especially when seeking to construct “snowball” samples of small or stigmatized subsets of the general population.” Out of all the social networking sites, Facebook is best suited for performing market research because each user has their own set of online friends while also having access to millions of users worldwide if needed. This is especially relevant to the study of canned vs. bottled craft beers as the study targets the younger demographic between the age of 21 and 33, which is an easily accessible demographic.
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Along with being the biggest and fastest growing social network in the world, Facebook presents various other positive qualities. For instance, Facebook provides information and designated pages for different interests, education levels, and hobbies that could be used to analyze sub populations of beer drinkers. Also, this form of social networking is becoming more and more representative of the United States population. According to O’Dell (2011), nearly 43% of the American population uses Facebook at least once a month compared to only 7% on twitter. Furthermore, a strong majority of the Facebook population falls under the age demographic of 21-25. One of the biggest research methods discussed in Brickmann-Bhutta’s (2000) study is called snowballing, a chain-referral type of online survey. This technique is useful in that it takes a small sample population related to a certain population, and asks these individuals to recommend others for the survey study based on certain characteristics. Doing this is beneficial in that it gradually increases the sample size and targets desired subpopulations. For the study of consumer perception of canned craft beer vs. bottled, it could be very useful to delineate the population into various groups such as college undergraduate, graduate, post-graduate work etc. Furthermore, people feel more willing to offer up personal information such as income, marital status and current living location online rather than face-to-face. However, the only downside as mentioned by Brickmann-Bhutta (2009) is the possibility for sample bias, which needs to be avoided. Some of the other potential problems according to Schmidt (1998) include incomplete responses, unacceptable
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responses, and multiple submissions. These are all risks that can be avoided by taking the proper measures.
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Chapter 3
METHODOLOGY
Procedures for Data Collection-
Consumer perception is the main point of focus in this survey study. The first portion of the survey will measure the current level of knowledge and perception concerning canned versus bottled craft beer. Once this area of the survey is completed, consumers will be asked to read a list of qualities comparing aluminum cans versus bottles. Furthermore, the survey will measure the level of importance that drinkability convenience, recycling, pricing, etc. has when it comes to purchasing decisions. The final portion will attempt to analyze how consumer perception is changed with new awareness and whether or not future purchasing decisions will vary. The hypothesis states that millennials are more open to purchasing canned craft beers. In order to fulfill the survey requirements, a sample size of 150+ will be needed. Of the desired 150 respondents, at least 75 will be of the age range 21-33 and the other half will fall under the age range of 28+. This gives the surveyor a chance to compare data from millennial respondents against the rest of the population. A mix of primary and secondary data will be utilized to perform the necessary statistical analysis. Online survey distribution via the social network Facebook will be utilized to reach the quota of 75+ respondents in the age group 21-33. Facebook and Email will be used to obtain the desired 75+ respondents above the age of 33. Surveys will be hand distributed throughout the process as well to help meet the desired level of responses. Ultimately, there is no
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limit on the sample size as bigger samples help limit bias and statistical error. The fluctuant time range of when the data must be obtained is from September 2013November 2013. This will give ample time to perform the desired statistical analysis and test the hypothesis. The survey will begin with two screening questions. The first one will determine the age of the respondent. If the respondent is under 21 years of age, the survey will be terminated. The next screening question asks what types of beers they have purchased in the past month. The list includes domestic, imported, craft, and none of the above. Once again, the survey will be terminated if a “none of the above” response is provided. These two questions will be presented on the first page of the survey. This canned beer study will consist of 15 questions. The survey format will be comprised of eight ordinal, four nominal, and three ratio questions. Three demographic questions including gender, age, and income will also be included to help analyze our results.
Procedures for Data Analysis
A .05 level for extreme significance and .1 level for moderate significance will be used for any test that examines a correlation. A list of the analysis functions that will be utilized include the following: frequencies, descriptives, chi square tests of variance, and independent sample t tests. Once the data is gathered, frequencies will be run on each question to make sure no bad data was obtained. “Bad data” means that a respondent
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answered with a number that does not correspond with the survey options. If bad data is present, it will be necessary to recode and add the unwanted data as “system missing.” This is a very important step as not doing so would skew our data, a very concerning possibility for survey analysis. Once all bad data is removed, frequencies will be run on every question to obtain a statistical overview of the entire population. It is important to note any skewed data or interesting trends before subdividing the data. Once results from the total population are obtained, the data on the spss software will be recoded into two groups, millennials and non-millennials. Therefore, all respondents of age groups 21-33 will be recoded and entered into the system as 1 and the rest of the population will be recoded and entered as a 2. This makes it possible to test the target population against the older demographic when performing chi square test of variance and independent sample t tests. The first test that will be run is a chi square variance test comparing what types of beer the respondents had purchased over the past three months. The list will include domestic, imported, and craft. The next two tests will be independent sample t tests to determine how much the two age groups spend on beer in a typical month and the number of 12 oz. bottles/cans of beer they purchase in a typical month. The remaining questions will be analyzed with chi square tests of variance. All of the data except for questions 11 and 13 will be analyzed in the exact same fashion. The two questions mentioned previously will require a recode of the data to obtain the desired results. For example, all of the respondents that responded to question 11 with 70% or higher will be recoded and entered into the system as a 1 and the rest of
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the responses will be recoded and entered into the system as a 2. The similar procedure will be performed for question 13 except the data will be analyzed at the 80% level instead of 70%. These two questions will be the main focus on determining whether or not to accept the null hypothesis. As mentioned previously, a p-value of .05 will exemplify strong significance to accept the null and a p-value of .1 or less will represent moderate significance. Assumptions It is assumed that each respondent answered the survey questions truthfully. Furthermore, we will assume that the sample population of 150+ accurately reflects a larger population. Finally, it will be assumed that respondents generated via the social network Facebook are similar to the respondents located in San Luis Obispo County. Limitations This study will obtain most of its responses from the San Luis Obispo and Bay Area counties. These counties may not accurately reflect California and the United States. Furthermore, this survey is limited to actual “beer drinkers” rather than testing how raising consumer awareness affects the entire population. Finally, the study is limited to individuals who are willing to participate in the survey research.
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Chapter 4 DEVELOPMENT OF THE STUDY Empirical Results for Canned Craft Beer Study (Overview of Total Population):
Age Distribution 21-24 25-28 29-33 34-38 39-44 45-50 51-56 57-64 65+
42% 7% 7% 3% 3% 4% 10% 14% 7%
-As expected, the age demographic of 21-24 had the largest share of responses at 42% -The rest of the data was fairly evenly represented with the age range of 57-64 having the second highest showing at 14% - Middle aged respondents, 34-50, appear to be the minority demographic (combined 10%)
Types of Beer Purchased 75%
- The largest percent of respondents reported they had purchased domestic beer in the past 3 months (71%)
70%
65%
- Craft beer was a close second at 68%, and imported came in at 60%, demonstrating a fairly constant distribution of responses
60% 55% 50%
Domestic Beer
Imported Beer
Craft Beer
Price Range for Six Pack Purchases $0-$2.49 $2.50-$4.99 $5.00-$6.49 $6.50-$7.99 $8.00-$9.49 $9.50-$10.99 $11.00+
0% 1% 6% 23% 40% 23% 5%
- The most common purchased six pack was in the price range of $8.00-$9.49 at 40% - The price ranges directly below and above the $8.00-$9.49 range had the exact same results at 23% a piece
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How Appealing are Craft Beers? 80%
- A majority of respondents said craft beers are either extremely or very appealing to them (70%)
70% 60% 50%
- The other 30% comprised of respondents who said craft beers were either somewhat appealing, not very appealing, or not at all appealing,
40% 30%
20% 10% 0% Extremely/Very Appealing
Somewhat/Not Very/Not at all Appealing
Percentage of Purchases at Retail Outlet - About 3/4 of beer purchases in retail outlets were in the form of a bottle compared to 1/4 in cans
Can 27% Bottle 73%
Can
Bottle
Percentage of Purchases Consisting of Craft Beers Percentage Range 0%-19% 20%-39% 40%-59% 60%-79% 80%-100%
Retail Outlet
32% 20% 12% 14% 23%
Bar/Restaurant 23% 15% 14% 23%
-For retail outlet purchases, a majority of respondents at 32% stated that 0%-19% of their purchases were craft beers, while 23% stated 80%-100% consisted of craft beers -Bar/Restaurants saw a fairly even distribution with 26% responding that 80%-100% of purchases were craft beers and 23% responding with 0%-19%
26%
Total Amount of Beer Purchased/Month
Maximum Response
Average
Money Spent in Typical Month 12 oz Bottles/Cans Purchased in Typical Month
$250 200
$35.26 21.335
-As an entire population, the average amount spent on beer in a typical month was $35.26. Most respondents purchased about twenty-one 12 oz. bottles/cans of beer in a month.
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Top Desirability for Each Figure Feature Prestigious Brand Creative Label Locally Produced Inexpensive Recommended by Friends High Alcohol Content On Sale Packaged in a Bottle Made by a Craft Brewer Environmentally Friendly Package
Top Response
Percent
Somewhat Desirable Somewhat Desirable Very Desirable Somewhat Desirable Very Desirable Somewhat Desirable Very Desirable Very Desirable Very Desirable Somewhat Desirable
36% 32% 34% 36% 51% 29% 30% 45% 32% 28%
- The most desirable trait for any beer purchase is one recommended by friends. This category most commonly received responses of “very desirable” at 51% -The least desirable trait for purchasing beer is one with an environmentally friendly package. The top response for this category was somewhat desirable at 28%.
Preferred Form of Packaging Based on Perception Description Interesting Label Design Drinking Convenience More Environmentally Friendly Better Feel in Hand Embodies idea of "craft beer" Cheaper Product Better Taste Overall Appeal
Preference (Bottle/Can) Bottle Can Can Bottle Bottle Can Bottle Bottle
Percent 62% 76% 53% 88% 95% 84% 92% 87%
-95% of respondents said that bottles embody the idea of a “craft beer” more than cans -Collectively, it appears that bottles are favored over cans based on the descriptions -Cans received a majority of responses on three out of the eight descriptions: drinking convenience (76%), more environmentally friendly (53%), and cheaper product (84%) 21 -It appears that consumers see cans as a cheaper and more convenient form of drinking beer rather than something representing a premium craft beer product
Level of Willingness to Purchase Craft Beers in Can (Change in Top 3) Certain Will Buy (99 chances in 100) Almost Sure Will Buy (90 chances in 100) Very Probably Will Buy (80 chances in 100)
Before
After
5%
11%
12%
18%
19%
30%
-It appears that creating further consumer awareness about the beneficial aspects of cans vs. bottles would increase the purchasing of craft beers in cans -After reading the information provided, 59% of the respondents said they were either “certain to buy,” “almost sure to buy,” or “very probable to buy.” This means that 59% of the respondents were at least 80% sure they would be willing to purchase craft beers in cans
Gender Distribution Female 29%
-A strong majority of the respondents were male (71%)
Male 71%
Income Before Taxes unemployed/student under $10,000 $10,000-$14,999 $15,000-$19,999 $20000-$24,999 $25,000-$29,999 $30,000-$34,999 $35,000-$39,999 $40,000-$49,999 $50,000-$59,999 $60,000-$74,999 $75,000-$149,000 $150,000 or more
16% 9% 4% 2% 0% 4% 3% 4% 1% 5% 7% 14% 30%
-The largest percentage of respondents had a total annual income before taxes of $150,000 or more- 30% -The next closest group were individuals that were either unemployed or students- 16%
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Testing the Hypothesis: “The millennial demographic (21-33) is more open to purchasing craft beers in cans than other age groups. Creating consumer awareness amongst both millennials and nonmillennials highlighting the beneficial aspects of cans versus bottles will further enhance their willingness to purchase.” *In order to test the hypothesis, the data was recoded into the following groups: millennials (21-33) and non-millennials (34+) *Strength of correlation was determined as followed: P-value
